EUR/USD Forecast – Euro Gives Up Early Gains

EUR/USD Forecast Video for 26.10.23

Euro vs US Dollar Technical Analysis

The euro initially tried to gain during the trading session on Wednesday but found trouble yet again to show signs of negativity. Ultimately, this is a market that I think will continue to be very noisy, but it is still in the midst of building a huge bearish flag, and we are inside the channel part. If we can break down through the bottom of the channel, that opens up a move down to the 1.05 level, perhaps even down to the 1.0250 level. The 1.0250 level has been important in the past, so it does make a certain amount of sense that we would see buyers step in and try to support the market. Underneath there, then the euro could go looking down to the parity level.

On the upside, the 50-Day EMA has offered a little bit of resistance at the top of the candlestick from both Monday and Tuesday, so that indicator looks as if it is going to offer a bit of a short-term ceiling. Breaking above that indicator would be very bullish and could signal that the flag has failed. While I don’t necessarily expect that to happen very easily, we can at least see that as a potential alternative scenario to pay attention to.

The European Union is heading into a recession, and Germany is going to have major issues this winter. Because of this, I think it makes quite a bit of sense that the euro will continue to languish, especially as the Federal Reserve keeps rates higher for longer in the United States, making the US dollar more attractive. The ECB is much more likely to loosen monetary policy than the Federal Reserve in the near term, so therefore it does make quite a bit of sense that we continue to see downward pressure. When you look at this chart, it is obviously very bearish, but recently we have been chopping around, trying to wait and see where we go next, but it seems as if the downward pressure continues overall, and therefore I look at each rally as an opportunity to start fading again, just as we have seen over the last 48 hours.

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